Proposed NSW funding to create new services in undersupply areas … what’s the catch?

Ahead of the NSW Budget (on 21 June 2022) and the NSW State Election (in just over 9 months’ time on 25 March 2023), the NSW Coalition Government has announced new funding to create (ie construct and operate) new early childhood education and care services where there is demand but limited or no adequate services for children and their parents/families/carers.


According to the NSW Government, Approved Providers will be able to bid for funding through a competitive process, commencing 1 July 2023, to help them deliver more accessible and affordable childcare. The NSW Government will make available $775m over four years to create 47,000 affordable places.


ACA NSW agrees that children’s access to early childhood education and care should not depend upon their postcodes. And as early as 2018, ACA NSW had been calling for a planning system. As such, ACA NSW welcomes the NSW Government’s proposal of effectively a planning system that will help ensure all children and their families will be able to benefit from early childhood education and care.


That said, given the absence of necessary detail, some of the initial obvious questions are:


  1. How will the NSW Government determine where are these areas of demand without adequate access to ECEC?
  2. What are the criteria that the independent expert panel (appointed by the NSW Government) will use to determine the successful proposal for a new service?
  3. Who will be appointed onto this new and transparent expert panel, when will they begin their work, what metrics and rules will they use to determine need, and will they publish their reasons for granting significant funds to new and economically unsustainable services?
  4. Will there be minimum and maximum contractual periods for when the NSW Government will agree to providing funding to support these economically unsustainable new services?
  5. Will the NSW Government fund these economically unsustainable new services in perpetuity if it never becomes economically viable?
  6. How with the NSW Government produce between 4,700 to 11,750 more early childhood educators (due to the existing NSW ratios or 1:10 and 1:4 respectively) to educate and care for the new 47,000 additional children in these identified areas, especially when the sector already needs 13,000 additional educators and teachers by 2023 for existing services?
  7. How will the NSW Government ensure that these new childcare centres will not negatively impact existing services, for example due to the severe labour shortages, if educators were to be “poached” from existing services, those services’ loss of that educator(s) can affect up to 10 children and their families who will then not be able to attend their chosen services?

It is ACA NSW’s understanding that the NSW Department of Education to date has offered funding for capital works exclusively to not-for-profit service providers. Consequently, the Department may need additional resourcing to ensure neutral, fair and economically sound rules, processes and personnel are established if it is to engage both the not-for-profit and the private sector toward these endeavours.


ACA NSW reserves its judgement and looks forward to the promised consultation and release of further details.


PUBLISHED: 15 JUNE 2022

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